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No, it is not. If you do not have a fiduciary relationship with Boeing and you have no confidentiality obligations with respect to the information, you are not

No, it is not. If you do not have a fiduciary relationship with Boeing and you have no confidentiality obligations with respect to the information, you are not trading on inside information. If you're in the plane when the door blows up, you're just the first person with material public information. You're not trading on material non-public information. See, e.g. https://www.law.cornell.edu/wex/misappropriation_theory_of_insider_trading https://www.law.cornell.edu/wex/misappropriation_theory_of_i...

arsome 3y ago
This is just news trading, you're just really fast because you're the headline.
labrador 3y ago
I love answers like this because it clears up confusion in few words and makes the answer obvious in retrospect
- abm53 3y ago
  It’s often a dangerous kind of answer. I once saw somebody say something to the effect that in every Hacker News thread, there is always a highly upvoted comment that sounds completely plausible, well argued, made by somebody who appears highly qualified to answer, and that is completely incorrect. I don’t think it’s always true, but it often is.
- SoylentOrange 3y ago
  Unfortunately in this case the answer as written is completely wrong. See the top reply. > If you do not have a fiduciary relationship with Boeing and you have no confidentiality obligations with respect to the information, you are not trading on inside information. Specifically this part. One of the first things you learn when doing mandatory insider trading training is you can easily run afoul of the law if you act on non-public info you overheard, or happened to see by accident, even if it has to do with some company with which you are not affiliated. A common example is you’re in a coffee shop and see an upcoming earnings report on someone else’s laptop screen, then trade based on that information.
  - labrador 3y ago
    The top reply currently for me is colinmorelli who says: > in this particular case is no, it's not insider trading You seem to be saying it could be, but that wouldn't mean the answer was "completely wrong" (your words)
    - SoylentOrange 3y ago
      The reasoning is totally wrong and while “no” is likely correct it’s more of a stopped clock sort of situation
colinmorelli 3y ago
Important clarification: you do not need to have confidentiality obligations with respect to the information or a fiduciary relationship, it need only be information that is material and non-public information that belongs to the company (i.e. only available to those with a fiduciary responsibility or confidentiality obligation to the company). If an insider with confidentiality obligations shares material non-public information with a person who has no confidentiality obligation, and that person trades on that information, that would be insider trading. The link you referenced also clarifies this point, but it is different from what is written in your comment. Note: this doesn't change the fact that the answer in this particular case is no, it's not insider trading. You are, as parent mentioned, just the first to know the news.
- dataflow 3y ago
  What does "non-public" mean here? If some information gets leaked without authorization by an insider (like when people leak stuff online...), (when) does that become public?
  - bwilliams18 3y ago
    There's no bright line. But jurisprudence puts it somewhere below 375 subscribers to a newsletter. https://www.bloomberg.com/opinion/articles/2023-11-02/the-banks-are-where-the-money-isn-t https://www.bloomberg.com/opinion/articles/2023-11-02/the-ba... (Journalism Section)
- ClumsyPilot 3y ago
  > it need only be information that is material and non-public. I think this is wrong as well. Suppose you are a independent technician repairing cars. Over time you notice, that, say BMW car quality used to be good but has gone to shit. That's not public information, but you would be allowed to short BMW stock in the hopes that, once public catches on, their share price will tank. In fact half the point of stock trading if for you to do research, including your own investigation and testing. And then use that as an advantage. In the process you are bringing the price close to it's true value. P.S. nothing against BMW, just an example.
mrb 3y ago
"If you do not have a fiduciary relationship with Boeing" Ok so what if you are a Boeing executive or engineer on said flight?
adrr 3y ago
Better question can the flight attendant buy puts? What about the air traffic controller who handled the emergency? It’s the exact same information. This is where insider trading rules just don’t make sense. Here’s a good example. You can buy credit card data from Bloomberg that will give you near accurate information on revenue. For earnings, you can pay to see if a company will meet expectations and trade off that information. If you work for the company, it’s insider trading. If you work for the credit card companies and get the same info and trade on it, it is also insider trading. Maybe we should make insider trading, trading off information that isn’t public.
- kortilla 3y ago
  >Maybe we should make insider trading, trading off information that isn’t public. This is stupid. It disincentivizes people who make a living externally auditing/investigating companies
  - Supermancho 3y ago
    > This is stupid. Why? Trading implies making stock trades based on non-public information. This has little to do with auditing and investigating, since that information is not necessarily public.
    - kortilla 3y ago
      Investigating is non public information.
zymhan 3y ago
This wasn't a question being posed to HN readers, it's a StackExchange post.

arsome 3y ago

This is just news trading, you're just really fast because you're the headline.

labrador 3y ago

I love answers like this because it clears up confusion in few words and makes the answer obvious in retrospect

abm53 3y ago
It’s often a dangerous kind of answer. I once saw somebody say something to the effect that in every Hacker News thread, there is always a highly upvoted comment that sounds completely plausible, well argued, made by somebody who appears highly qualified to answer, and that is completely incorrect. I don’t think it’s always true, but it often is.
SoylentOrange 3y ago
Unfortunately in this case the answer as written is completely wrong. See the top reply. > If you do not have a fiduciary relationship with Boeing and you have no confidentiality obligations with respect to the information, you are not trading on inside information. Specifically this part. One of the first things you learn when doing mandatory insider trading training is you can easily run afoul of the law if you act on non-public info you overheard, or happened to see by accident, even if it has to do with some company with which you are not affiliated. A common example is you’re in a coffee shop and see an upcoming earnings report on someone else’s laptop screen, then trade based on that information.
- labrador 3y ago
  The top reply currently for me is colinmorelli who says: > in this particular case is no, it's not insider trading You seem to be saying it could be, but that wouldn't mean the answer was "completely wrong" (your words)
  - SoylentOrange 3y ago
    The reasoning is totally wrong and while “no” is likely correct it’s more of a stopped clock sort of situation

colinmorelli 3y ago

Important clarification: you do not need to have confidentiality obligations with respect to the information or a fiduciary relationship, it need only be information that is material and non-public information that belongs to the company (i.e. only available to those with a fiduciary responsibility or confidentiality obligation to the company). If an insider with confidentiality obligations shares material non-public information with a person who has no confidentiality obligation, and that person trades on that information, that would be insider trading. The link you referenced also clarifies this point, but it is different from what is written in your comment. Note: this doesn't change the fact that the answer in this particular case is no, it's not insider trading. You are, as parent mentioned, just the first to know the news.

dataflow 3y ago
What does "non-public" mean here? If some information gets leaked without authorization by an insider (like when people leak stuff online...), (when) does that become public?
- bwilliams18 3y ago
  There's no bright line. But jurisprudence puts it somewhere below 375 subscribers to a newsletter. https://www.bloomberg.com/opinion/articles/2023-11-02/the-banks-are-where-the-money-isn-t https://www.bloomberg.com/opinion/articles/2023-11-02/the-ba... (Journalism Section)
ClumsyPilot 3y ago
> it need only be information that is material and non-public. I think this is wrong as well. Suppose you are a independent technician repairing cars. Over time you notice, that, say BMW car quality used to be good but has gone to shit. That's not public information, but you would be allowed to short BMW stock in the hopes that, once public catches on, their share price will tank. In fact half the point of stock trading if for you to do research, including your own investigation and testing. And then use that as an advantage. In the process you are bringing the price close to it's true value. P.S. nothing against BMW, just an example.

mrb 3y ago

"If you do not have a fiduciary relationship with Boeing" Ok so what if you are a Boeing executive or engineer on said flight?

adrr 3y ago

Better question can the flight attendant buy puts? What about the air traffic controller who handled the emergency? It’s the exact same information. This is where insider trading rules just don’t make sense. Here’s a good example. You can buy credit card data from Bloomberg that will give you near accurate information on revenue. For earnings, you can pay to see if a company will meet expectations and trade off that information. If you work for the company, it’s insider trading. If you work for the credit card companies and get the same info and trade on it, it is also insider trading. Maybe we should make insider trading, trading off information that isn’t public.

kortilla 3y ago
>Maybe we should make insider trading, trading off information that isn’t public. This is stupid. It disincentivizes people who make a living externally auditing/investigating companies
- Supermancho 3y ago
  > This is stupid. Why? Trading implies making stock trades based on non-public information. This has little to do with auditing and investigating, since that information is not necessarily public.
  - kortilla 3y ago
    Investigating is non public information.

zymhan 3y ago

This wasn't a question being posed to HN readers, it's a StackExchange post.